Mapping of Logistics Infrastructure of Central and Eastern Europe for Automotive Industry
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Mapping of Logistics Infrastructure of Central and Eastern Europe for Automotive Industry Irena Asakaite and Berk Celik Graduate Business School Logistics and Transport Management Master Thesis No. 2006:72 Supervisor: Leif Enarsson and Mats Boll Copyright 2007 by Irena Asakaite Berk Celik ii ABSTRACT Central and Eastern Europe as an emerging market has become very attractive for automotive OEMs, which are expanding rapidly in the region. Consequently, they are followed by the logistics service providers. However, poor logistics infrastructure including transport networks and logistics services has become the biggest challenge. LSPs and OEMs are concerned by the situation as their activities and performance are hampered by undeveloped infrastructure and its consequences. The governments are trying to upgrade and expand national logistics infrastructure through numerous intensive investment plans with the help of different funds. This thesis work is conducted on behalf of Volvo Logistics Corporation, which is the lead LSP of Volvo Group and some other external major OEMs, with the purpose of investigating and analysing the actual and future logistics and transport infrastructure aspects in CEE on regional and national levels. The research has been carried out for 16 countries under three main headings: transport infrastructure, logistics market and transport policy. In addition, the region’s integration and connection links with the neighboring countries and other important emerging markets, in particular Russia and China, are presented. The study covers road and rail transport modes and to some extent inland waterways which are the primary modes to move vehicles and parts within the region. In order to analyse CEE’s attractiveness for the automotive industry, the country-cluster matrix is developed. Research results indicate 4 clusters of countries with different potentials from the automotive and logistics industry perspectives. Finally, the findings, conclusions and recommendations are elaborated with respect to Volvo Logistics Corporation’s future operations and plans within the CEE region. Key words: Central and Eastern Europe (CEE), Automotive, Original Equipment Manufacturer (OEM), Logistics Service Provider (LSP), Logistics Infrastructure, Transportation, Volvo Logistics Corporation (VLC), Cluster Analysis. iii ACKNOWLEDGMENT Throughout this thesis work at Volvo Logistics Corporation, we have had a priceless and incomparable experience. We have been delighted to cooperate with numerous professionals who have been very helpful to share their versatile knowledge with us. We would like to take the opportunity to thank those who helped us to conduct this work successfully. First of all, we especially want to express our sincere gratitude to our supervisors: Mats Boll, manager at Volvo Logistics Corporation, for his invaluable guidance, encouragement and professionalism and providing us with a peaceful working atmosphere at his office; Leif Enarsson, professor at Göteborg University, for his support, advice and valuable feedbacks based on his knowledge and experience. In particular, we would like to thank all the employees at VLC who at some moments have taken from their daily tasks to answer our inquiries. Special thanks go to the department of logistics development and Dan Geyer for his support, enthusiasm and valuable inputs. In addition, we would like to thank all the interviewees and local contacts in different countries for the information they provided. Furthermore, we would like to thank the academic staffs at the departments of logistics and transport management at our universities, Göteborg University and Chalmers University of Technology, for their motivation and help. We are indeed grateful to Arne Jensen and Johan Woxenius. Finally, but certainly not the least, we wish to thank our families and friends for their endless support and patience. Irena Asakaite Berk Celik TABLE OF CONTENT 1. INTRODUCTION.............................................................................................................. 1 1.1. General Background........................................................................................................ 1 1.2. Problem Discussion......................................................................................................... 2 1.3. Research Questions ......................................................................................................... 3 1.4. Purpose............................................................................................................................ 4 1.5. Limitations ...................................................................................................................... 4 2. METHODOLOGY............................................................................................................. 5 2.1. Research Approach ......................................................................................................... 5 2.2. Research Design.............................................................................................................. 5 2.3. Data Collection Approach............................................................................................... 6 2.3.1. Methods for Data Collection.................................................................................... 6 2.3.2. Availability of Data.................................................................................................. 8 2.3.3. Data Collection Strategy .......................................................................................... 9 2.4. Data Analysis .................................................................................................................. 9 2.5. The Quality of the Study ............................................................................................... 10 2.5.1. Validity................................................................................................................... 10 2.5.2. Reliability............................................................................................................... 10 3. THEORETICAL FRAMEWORK ................................................................................... 11 3.1. Transport Infrastructure................................................................................................. 11 3.2. Transport Modes ........................................................................................................... 11 3.3. Transport Policy ............................................................................................................ 13 3.4. Infrastructure Bottlenecks ............................................................................................. 13 3.5. Intermodal Transport..................................................................................................... 14 3.6. Transport Actors............................................................................................................ 14 3.7. Logistics Centre and Hub.............................................................................................. 15 4. TRANSPORT POLICY ................................................................................................... 17 4.1. EU PERSPECTIVE....................................................................................................... 17 4.1.1. EU Transport Policy............................................................................................... 17 4.1.2. EU Transport Policy towards SEE......................................................................... 19 4.2. REGIONAL PERSPECTIVE ....................................................................................... 21 4.2.1. EU New Members and Candidates ........................................................................ 21 4.2.2. SEE Transport Policy............................................................................................. 25 4.3. TRANSPORT SAFETY AND SECURITY ................................................................. 27 4.3.1. Road Transport Safety............................................................................................ 27 4.3.2. Railway Safety ....................................................................................................... 31 4.3.3 Transport Security................................................................................................... 32 4.4. TRANPORT STANDARDS......................................................................................... 35 4.4.1. Infrastructure Standards ......................................................................................... 35 4.4.2. Driving Times ........................................................................................................ 39 4.4.3. Working Times....................................................................................................... 40 4.4.4. Regional Perspectives ............................................................................................ 41 4.5. INVESTMENTS ........................................................................................................... 45 4.5.1. Investment Requirements....................................................................................... 45 4.5.2. EU Funds................................................................................................................ 46 4.5.3. International Financial Institutions (IFIs) .............................................................